SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
____ OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 0-5556
CONSOLIDATED-TOMOKA LAND CO.
(Exact name of registrant as specified in its charter)
Florida 59-0483700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
149 South Ridgewood Avenue 32114
Daytona Beach, Florida (Zip Code)
(Address of principal executive offices)
(904) 255-7558
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
_____ _______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding
Class of Common Stock July 31, 2000
$1.00 par value 5,813,914
1
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CONSOLIDATED-TOMOKA LAND CO.
INDEX
Page No.
PART I - - FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
June 30, 2000 and December 31, 1999 3
Consolidated Condensed Statements of Income and
Retained Earnings - Three Months Ended and
Six Months Ended June 30, 2000 and 1999 4
Consolidated Statement of Shareholders' Equity -
Six Months Ended June 30, 2000 5
Consolidated Condensed Statements of Cash Flows -
Six Months Ended June 30, 2000 and 1999 6
Notes to Consolidated Condensed Financial Statements 7-9
Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-12
PART II -- OTHER INFORMATION 13
SIGNATURES 14
2
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PART I -- FINANCIAL INFORMATION
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
CAPTION
(Unaudited)
June 30, December 31,
2000 1999
---------- -------------
<S> <C> <C>
ASSETS
Cash & Cash Equivalents $ 279,458 $16,458,208
Investment Securities 23,210,331 16,689,438
Notes Receivable 6,984,483 7,365,754
Real Estate held for Development and Sale 11,301,535 11,624,833
Deferred Income Taxes 1,239,853 1,239,853
Refundable Income Taxes 1,212,164 --
Other Assets 1,581,092 1,634,499
Property, Plant, and Equipment - Net 9,444,889 8,407,805
---------- ----------
TOTAL ASSETS $55,253,805 $63,420,390
========== ==========
LIABILITIES
Accounts Payable $ 122,849 $ 251,241
Notes Payable 10,058,865 10,270,837
Accrued Liabilities 4,524,294 4,232,820
Income Taxes Payable -- 631,528
---------- ----------
TOTAL LIABILITIES 14,706,008 15,386,426
---------- ----------
SHAREHOLDERS' EQUITY
Common Stock 5,826,614 6,359,284
Additional Paid-in Capital -- 3,588,751
Retained Earnings 34,721,183 38,085,929
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 40,547,797 48,033,964
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $55,253,805 $63,420,390
========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE>
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
INCOME:
Real Estate Operations:
Sales and Other Income $ 1,304,720 $ 5,992,136 $ 2,802,398 $ 7,279,162
Costs and Other Expenses ( 1,509,951) ( 1,667,480) ( 2,795,736)( 2,809,608)
---------- ---------- ---------- ----------
(205,231) 4,324,656 6,662 4,469,554
---------- ---------- ---------- ----------
Profit On Sales of Undeveloped
Real Estate Interests 2,899 2,028,338 85,426 2,031,838
---------- ---------- ---------- ----------
Interest and Other Income 404,230 407,101 847,769 604,111
---------- ---------- ---------- ---------
201,898 6,760,095 939,857 7,105,503
General and Administrative Expenses ( 914,638) ( 878,483) ( 1,923,436) (1,868,689)
---------- --------- ---------- ----------
Income (Loss) From Continuing Operations
Before Income Taxes ( 712,740) 5,881,612 ( 983,579) 5,236,814
Income Taxes 263,689 (2,222,817) 363,692 (1,972,242)
---------- --------- ---------- ----------
Net Income (Loss) From Continuing
Operations (449,051) 3,658,795 (619,887) 3,264,572
Income From Discontinued Citrus
Operations, Net of Tax -- 7,859,660 -- 9,110,257
---------- ---------- ---------- ----------
Net Income (Loss) (449,051) 11,518,455 (619,887) 12,374,829
========== ========== ========== ==========
PER SHARE INFORMATION:
Basic and Diluted
Income (Loss) from Continuing
Operations $ (0.07) $ 0.57 $ (0.10) $ 0.51
Income From Discontinued Citrus
Operations, Net of Tax $ -- $ 1.24 $ -- $ 1.43
---------- ---------- ---------- ---------
Net Income (Loss) $ (0.07) $ 1.81 $ (0.10) $ 1.94
========== ========== ========== =========
Dividends Per Share $ 0.05 $ -- $ 0.10 $ .35
========== ========== ========== =========
See accompanying Notes to Consolidated Condensed Financial Statements.
4
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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
</TABLE>
<TABLE>
<CAPTION>
Additional
Common Paid-In Retained
Stock Capital Earnings Total
------- ----------- --------- ------
<S> <C> <C> <C> <C>
Balance, December 31, 1999 $ 6,359,284 $ 3,588,751 $ 38,085,929 $ 48,033,964
Net Loss (619,887) (619,887)
Cash Dividends ($.10 per share) (613,221) (613,221)
Repurchase of 532,670 Shares (532,670) (3,588,751) (2,131,638) (6,253,059)
----------- ------------ ------------- -----------
Balance, June 30, 2000 5,826,614 -- 34,721,183 40,547,797
=========== ============ ============= ===========
</TABLE>
5
<PAGE>
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended
----------------------
June 30, June 30,
2000 1999
-------- --------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (619,887)$ 12,374,829
Adjustments to Reconcile Net Income to Net Cash
Provided by(Used In) Operating Activities:
Discontinued Citrus Operations -- (9,110,257)
Depreciation and Amortization 138,339 126,452
Gain on Sale of Property, Plant and Equipment -- (10,305)
Decrease (Increase) in Assets:
Notes Receivable 381,271 (1,671,884)
Real Estate Held for Development and Sale 323,298 (1,414,895)
Refundable Income Taxes (1,212,164) --
Other Assets 53,407 (181,449)
(Decrease) Increase in Liabilities:
Accounts Payable (128,392) (52,841)
Accrued Liabilities 291,474 657,007
Income Taxes Payable (631,528) 8,080,518
--------- ---------
Net Cash (Used In) Provided by Operating Activities (1,404,182) 8,797,175
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment ( 1,175,423) ( 465,361)
Net Increase in Investment Securities ( 6,520,893) (25,783,286)
Proceeds from Sale of Property, Plant,
and Equipment -- 20,883
Cash from Discontinued Citrus Operations -- 23,161,794
---------- ----------
Net Cash Used In Investing Activities ( 7,696,316) (3,065,970)
---------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Notes Payable -- 2,469,000
Payments on Notes Payable ( 211,972) (2,752,444)
Funds Used to Repurchase Common Stock ( 6,253,059) --
Dividends Paid ( 613,221) (2,230,142)
--------- ---------
Net Cash Used in Financing Activities ( 7,078,252) (2,513,586)
--------- ---------
Net (Decrease) Increase In Cash and
Cash Equivalents (16,178,750) 3,217,619
Cash and Cash Equivalents, Beginning of Year 16,458,208 283,200
--------- ---------
Cash and Cash Equivalents, End of Period $ 279,458 $ 3,500,819
========= =========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
6
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Principles of Interim Statements. The following
unaudited consolidated condensed financial statements
have been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain
information and note disclosures which are normally
included in annual financial statements prepared in
accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules
and regulations. The information presented in the unaudited
consolidated condensed financial statements reflects
all adjustments which are, in the opinion of the
management, necessary to present fairly the Company's
financial position and the results of operations for the
interim periods. The consolidated condensed format is designed
to be read in conjunction with the last annual report. For
further information refer to the consolidated financial
statements and the notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
The consolidated condensed financial statements include
the accounts of the Company and its wholly owned
subsidiaries. Intercompany balances and transactions
have been eliminated in consolidation.
2. Discontinued Citrus Operations. On April 7, 1999 the Company
completed the sale of its citrus operations. The results
of the citrus operations have been reported separately as
discontinued operations in the Consolidated Condensed
Statements of Income. There were no remaining assets or
liabilities of the operations as of June 30,2000 and December
31,1999. Summary financial information of the citrus
operations is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues from Discontinued Citrus
Operations -- $ 235,658 -- $5,393,171
========= ========== ========== ==========
Income from Discontinued Citrus
Operations Before Tax -- 201,314 -- 2,206,440
Income Tax Expense from Discontinued
Citrus Operations -- ( 75,754) -- ( 830,283)
Gain on Sale of Citrus Operations
(Net of Income Tax of $4,666,253) -- 7,734,100 -- 7,734,100
--------- --------- --------- ----------
Net Income from Discontinued
Citrus Operations -- $ 7,859,660 -- $9,110,257
========= ========= ========= =========
</TABLE>
7
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3. Common Stock and Earnings Per Common Share. Pursuant to the
stock repurchase program, approved by the Board of Directors
at their July 21, 1999 meeting, the Company repurchased
532,670 shares of its common stock at a cost of $6,253,059
during the six months ended June 30, 2000. Basic earnings per
common share are computed by dividing net income by the
weighted average number of shares of common stock outstanding
during the year. Diluted earnings per common share are
determined based on assumption of the conversion of stock
options at the beginning of each period using the treasury
stock method at average cost for the periods.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ------------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Income Available to Common
Shareholders:
Income (Loss) from Continuing
Operations $ (449,051) $3,658,795 $ (619,887) $ 3,264,572
Income from Discontinued Citrus
Operations -- 7,859,660 -- 9,110,257
--------- --------- --------- ---------
Net Income (Loss) $ (449,051) $ 11,518,455 $(619,887) $12,374,829
========== ========== ========= ==========
Weighted Average Shares
Outstanding 5,893,079 6,371,833 6,063,264 6,371,833
Common Shares Applicable to Stock
Options Using the Treasury Stock
Method -- 6,396 -- 6,775
--------- --------- --------- ---------
Total Shares Applicable to Diluted
Earnings Per Share 5,893,079 6,378,229 6,063,264 6,378,608
========= ========= ========= =========
Basic and Diluted Earnings Per Share:
Income (Loss)from Continuing
Operations $ (0.07) $ 0.57 $ (0.10) $ 0.51
Income from Discontinued
Citrus Operations $ -- $ 1.24 $ -- $ 1.43
------- --------- --------- ---------
Net Income (Loss) $ (0.07) $ 1.81 $ (0.10) $ 1.94
======= ========= ========= =========
</TABLE>
8
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4. Notes Payable. Notes payable consist of the following:
<TABLE>
<CAPTION>
June 30, 2000
-------------------------------------
Due Within
Total One Year
-------------------------------------
<S> <C> <C>
$ 7,000,000 Line of Credit $ $
Mortgage Notes Payable 9,662,656 333,214
Industrial Revenue Bond 396,209 93,367
----------- --------
$10,058,865 $ 426,581
========== =========
</TABLE>
Payments applicable to reduction of principal amounts will be
required as follows:
Year Ending June 30,
-------------------
2001 $ 426,581
2002 8,239,335
2003 119,013
2004 73,936
2005 1,200,000
Thereafter --
----------
$10,058,865
==========
In the first six months of 2000, interest totaled $436,235 of
which $15,583 was capitalized to property, plant and equipment.
Total interest for the six months ended June 30, 1999 totaled
$457,817, of which none was capitalized.
9
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MANAGEMENT'S DISCUSSION AND ANALYSIS
The Management's Discussion and Analysis is designed to be read
in conjunction with the financial statements and Management's
Discussion and Analysis in the last annual report.
RESULTS OF OPERATIONS
Real Estate Operations
Real estate operating losses totaling $205,231 for the second
quarter of 2000 represent a significant downturn from the
$4,324,656 profit produced during 1999's second period. This
downturn can primarily be attributed to low commercial real
estate closing volume. During 1999's second three month period
141 acres of commercial property was closed, generating gross
profits approximating $4,700,000. This compares to the 3 acres
of land sold during 2000's second quarter, which generated gross
profits totaling $82,000. Golf operations experienced a $30,000
decrease in profits when compared to the prior year. This decline
from golf operations occurred despite a 16% jump in revenues.
Increased golf course maintenance and equipment leasing costs
resulted in a 16% rise in golf course expenses.
For the first six months of 2000 commercial real estate closing
activity was also the prime factor in the decline in profitability
when compared to the prior year. Breakeven results in real
estate operations were posted for the current year with profits
of $4,469,554 generated during 1999's first six months.
Gross profits of $117,000 were recorded on the sale of 12 acres
of land during 2000 to date, with the sale of 146 acres generating
gross profits of $4,780,000 one year earlier. Higher golf
course maintenance costs offset a 13% rise in golf revenue,
resulting in a $109,000 decline in profits from
golf operations. Forestry operations had a positive impact on the
first half of 2000 as an 83% rise in revenues resulted in a 149%
increase in profits from forestry operations to $163,000.
General, Corporate and Other
Releases of subsurface entry rights account for the profits
on the sale of undeveloped real estate interests of $2,899 and
$85,426 for 2000's second quarter and first six months,
respectively. Sales of undeveloped real estate interests during
1999's first six months and second quarter included $2,010,000
realized on the sale of 100 acres of land along with a small
profit recognized on the release of subsurface interests in both
periods.
Interest and other income of $404,230 for the second quarter of
2000 was in line with the $407,101 realized for the same period
10
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of 1999. A 40% increase in interest and other income was produced
during the six month period, when compared to the prior year, due
to higher interest earned on the increased funds generated from the
April 1999 sale of the citrus operations. Interest and other
income totaled $847,769 and $604,111 for the first six months of
2000 and 1999, respectively.
General and administrative expenses rose 4% and 3% for the second
three month period and first half of the year, respectively.
These higher expenses are the result of increased shareholders'
expense, due to the increase in the number of shareholders
from the distribution of Company stock by Baker Fentress & Co.
in the third quarter of 1999, along with higher salaries and
benefits expense.
Discontinued Citrus Operations
During the second quarter of 1999 the Company consummated the sale
of its citrus operations. After-tax profits from operating
activities of $125,560 and $1,376,157 were recognized during the
second quarter and first six months of 1999, respectively.
The sale of the operations resulted in an after-tax profit of
$7,734,100 posted during the second quarter of 1999.
FINANCIAL POSITION
The Company posted a net loss from continuing operations
totaling $619,887, equivalent to $.10 per share, for the first
six months of 2000. This represents a substantial downturn
from 1999 first six months profits from continuing operations
totaling $3,264,572, equivalent to $.51 per share.
The unfavorable results are due to a lack of significant commercial
real estate transactions closed during the current period. Net
income for the first six months of 1999, including results
from discontinued citrus operations,totaled $12,374,829,
equivalent to $1.94 per share.
Cash and temporary investments declined $9,650,000 during the
first six months of 2000. The primary uses of these funds
were: $6,250,000 used to repurchase 532,670 shares of the
Company's stock, $1,200,000 of income taxes paid on 1999's
income, $1,175,000 spent for the acquisition of property,
plant and equipment and $600,000 in dividends paid, equivalent
to $.10 per share. Property, plant and equipment additions
consisted primarily of the construction of the clubhouse facility
at the LPGA International development. Capital funding
requirements for the remainder of the year consist of
approximately $3,500,000 to be spent on property and equipment
additions, in addition to the continuation of the stock buyback
program. Property and equipment additions will involve
primarily the continued construction of the clubhouse
along with construction of frontage roads along Interstate 95.
Sources to meet these obligations will continue to be cash and
short-term investments.
11
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Development and construction activities at the LPGA International
mixed-use project continue. The construction of the clubhouse
and amenities are projected to be substantially complete by
year end. The residential development of five new
residential communities by Renar Development Company is progressing
with development work anticipated to be completed by
year end. Residential sales activity has been relatively slow,
but buyer interest and sales should increase as the clubhouse
and development work nears completion.
Although real estate closing activity was slow for the first six
months of 2000, interest in Company lands remains relatively
strong. A significant contract backlog is in place for
closing in 2000, with contract negotiations on Company lands a
continual process. The conversion of this contract backlog
and contract negotiations to closings remains the primary emphasis
of the Company's management since all contracts have contingencies
which must be resolved.
Management continues to work towards its objective of diversifying
its development activities and building a portfolio of income
properties in order to become a company with a more predictable
earnings pattern from geographically dispersed Florida real
estate holdings.
12
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PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which
the Company or its subsidiaries is a party.
Items 2 through 5.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit (11) - Incorporated by Reference on Page 8
of this 10-Q report.
Exhibit (27) - Financial Data Schedule
(b) Reports on Form 8-K
No form 8-K reports were filed during the period.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CONSOLIDATED-TOMOKA LAND CO.
(Registrant)
Date: August 3, 2000 By: /s/ Bob D. Allen
---------------------
Bob D. Allen
Chairman of the Board & Chief
Executive Officer
Date: August 3, 2000 By: /s/ Bruce W. Teeters
-----------------------
Bruce W. Teeters
Sr. Vice President-
Finance & Treasurer
14
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